Corn Extends Rebound from Three-Year Low on Harvest Outlook

Corn rose for a second session in Chicago, extending a rebound from a three-year low, after a government report showed production in the U.S. will be smaller than analysts expected.

Farmers will harvest a record 13.989 billion bushels, the U.S. Department of Agriculture said Nov. 8. While that was 1.1 percent more than the USDA projected in its prior report in September, it was below the 14.029 billion bushels expected by analysts in a Bloomberg survey. Corn slid 38 percent this year on expectations for a record U.S. harvest after drought slashed yields in 2012 and pushed futures to all-time highs.

Corn prices "have virtually bottomed out," Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, said in an e-mailed report. "The USDA’s figure for the U.S. corn crop remained below the 14 billion-bushel threshold. Although the per-acre yield was upwardly corrected by a significant amount, the acreage itself was reduced."

Corn for delivery in December added 0.5 percent to $4.29 a bushel at 6:54 a.m. on the Chicago Board of Trade after touching $4.32, the highest since Oct. 31. Prices climbed 1.5 percent on Nov. 8. Before the USDA forecast, futures fell last week to $4.155, the lowest since August 2010. The U.S. is the world’s largest producer of the grain.

The USDA also raised its forecast for U.S. corn exports to 1.4 billion bushels, more than the 1.225 billion estimated in September. Domestic inventories at the end of the 2013-14 season may be 1.887 billion bushels, bigger than previously estimated while below analyst expectations of 2.044 billion bushels.

Soybean Stockpiles

Soybeans for delivery in January fell 0.3 percent to $12.925 a bushel, after climbing 2.3 percent on Nov. 8, the most in eight weeks. Global inventories before next year’s harvest will total 70.23 million metric tons, the USDA report showed, below the 71.54 million predicted two months earlier. U.S. production will be 3.413 billion bushels, above September’s estimate and higher than analyst expectations of 3.215 billion.

U.S. harvests are nearing completion, with 73 percent of corn and 86 percent of soybeans collected in the main growing areas, USDA data show. The agency is scheduled to update its weekly crop-progress report tomorrow.

Wheat for delivery in December rose 0.4 percent to $6.5225 a bushel, after declining 2.7 percent last week. In Paris, milling wheat for delivery in January added 0.9 percent to 205 euros ($275) a ton on NYSE Liffe.